5 October 2006 Edition

Energy review - Positive state role is ignored

BY ROBBIE SMYTH

Martin Ferris

Ferris attacks gas price hike

As Irish consumers get ready for a 34% increase in gas prices and a New Year
20% hike in ESB bills its clear the country has an energy crisis.

Last Sunday, an array of government ministers including the Taoiseach,
presented a 112-page Green Paper on A Sustainable Energy Future for Ireland
filled with a lot of aspirations but few figures on solving the energy
problems we face because of years of piecemeal flawed initiatives and the
lack of a vision to develop our existing natural oil and gas resources or
tap the full potential of renewable resources through wind, wave and other
technologies.

The 26 Counties has the second highest electricity prices in Europe and with
66% of energy coming from oil and gas and this is set to continue for the
foreseeable future. So what was the core of the Fianna Fail Green Paper?
There are three pillars to the government policy - security of supply,
environmental sustainability and competitiveness.

In terms of energy security there are serious challenges, 80% of the natural
gas used in the 26 Counties is imported from Britain, and 56% of all energy
demand including transport comes from oil.

The Green Paper tells us that "the Government's commitment to offshore
exploration is critical", but there is nothing on how to ensure that the
economy will benefit from any new exploration. Sinn Fein has consistently
called for a revision of the oil and gas exploration terms, but it is not
dealt with in this paper.

Oil and gas giveaway

Corrib is mentioned but there is no reference to the giveaway of oil and gas
resources that yields no tax revenue to the state or the fact that Irish
households and businesses will have to pay top price for any gas pumped
ashore. With exploration of the Slyne, Donegal and Erris basins in coming
years it seems we will be repeating the failures of the Corrib giveaway.

The government does raise its target for energy from renewable sources to
30% by 2020, doubling the 15% target for 2010, and there is repeated support
in the paper for the development of an all Ireland energy market.

The greatest flaw in the Green Paper is in the accompanying review by
Deloitte of the ESB that rejects the mass privatisation of the public sector
firm and in particular recommends that ESB networks remain in state control.
If this logic was extended on all-island basis we could have a publicly
owned power network for the island. However the government Green Paper talks
only of private sector development of offshore oil and gas reserves and
private sector driven developments in the renewable energy sector so at a
basic level they are ignoring the positive contribution the state can make
to not only securing energy supplies but developing renewable energy
resources also.

The irony of the green paper launch was that it coincided with a 34%
increase in gas prices for domestic consumers which will be levied for a
year despite the recent fall in international oil prices. The price hike
means that gas prices have risen by over 50% in the last two years.

Sinn Féin's Martin Ferris attacked the decision to go ahead with the price
rise. Ferris said that "the international situation had changed recently"
and that the "massive hike is not only disproportionate but will have a
detrimental impact on the living standards of many low income households".